Ireland’s economy forecast to be fastest grower in EU

Ireland’s services sector expanded at a strong pace again in February, driven by rising domestic demand as new business from abroad slowed, that’s according to a survey released today.

Ireland’s economy is forecast to be the fastest-growing in the European Union again this year and data released so far in 2015 has shown growth may be less reliant on strong exports, with unemployment falling, tax receipts growing and retail sales up again.

The Investec Purchasing Managers’ Index of activity in the services sector, which covers businesses from banks to hotels, came in at 61.4, down from January’s near-eight year high of 62.5 but still performing well. The index has stayed above 60 for a year and has not fallen below the 50-point line denoting growth since July 2012. The new export business sub-index fell to 57.5 from 60.1 a month earlier, its lowest level since May 2013. It follows a poll on Monday that showed Irish manufacturing activity rebounded in February to a 15-year high as strong new orders helped boost employment in the sector.

“It would appear that the domestic economy was a key driver of growth in February. The new business index remained in buoyant territory, with respondents indicating that improved client confidence had helped them to secure new contracts,” Investec Ireland chief economist Philip O’Sullivan said.

“Notwithstanding the softening of a number of the indices within the PMI survey, Irish services firms remain upbeat about their future prospects. Taken together with the manufacturing PMI release, the report confirms ongoing positive momentum for a sizeable proportion of the private sector in Ireland.